A Touch of Crude
American bankers handled his loot. Oil companies play by his rules.
The Bush administration woos him. How the pursuit of oil is propping
up the West African dictatorship of Teodoro Obiang.
By Peter Maass
Illustration By: Jeffrey Decoster
Map by Baker Vail
January/February 2005 Issue
* The Resource Curse
http://www.motherjones.com/news/featurex/2005/01/barrel.html
* Oil Slick: The Obiang regime tries to spin the Riggs scandal.
* The Thirty-Year Itch
* Public Money in the Pipeline
* Crude Measures: An interview with Peter Maass
The red dirt of the jungle meets a paved road on the outskirts of
Ebebiyin, where a national celebration is about to begin. Women are
singing and swaying in an African rhythm that is hard to resist, even
though their lyrics are not of a can't-stop-dancing variety: "We
await you, Mr. President," they sing in Fang, the main language in
Equatorial Guinea. "We are happy to see you; you are the people's
president." In the distance, a cloud of Martian dust heralds the
arrival of President Teodoro Obiang Nguema Mbasogo.
The president is accompanied by 40 vehicles and enough firepower to
start a small war. In the lead are army-green trucks, with soldiers
clad in black ninja outfits. Because the president doesn't entirely
trust his military, the jeeps in front of his Lexus SUV bear his
Moroccan security guards, many of them perched on the running boards,
clutching Heckler & Koch assault rifles as they scan the horizon.
The motorcade halts at the edge of the town and its
chickens-in-the-road squalor. Obiang strolls up the street, shaking
hands with people who line the uneven sidewalks, many clad in
T-shirts and dresses bearing his image. His bearing is regal. If he
has any anxiety because of a recent coup attempt, which involved a
gang of couldn't-shoot-straight mercenaries from South Africa and
Britain (allegedly financed by the son of former British Prime
Minister Margaret Thatcher), he does not betray it. And if his mind
is troubled by a recent U.S. Senate investigation detailing how he
siphoned millions from his country's treasury with the help of Riggs
Bank in Washington, D.C., and how he and members of his inner circle
extracted large and unorthodox payments from American oil companies,
that, too, does not show.
Obiang has traveled to Equatorial Guinea's mainland from his palace
on the island capital of Malabo to celebrate the 36th anniversary of
independence from Spain. The three-day gala is replete with
references to the 1979 overthrow of Francisco Macias Nguema, the
nation's first dictator. Macias, who once tortured and killed
political opponents in a soccer stadium, drowning out their screams
by playing "Those Were the Days" on the loudspeakers, was ousted and
executed in a coup led by a senior military aide who was also his
nephew -- Teodoro Obiang.
For "El Libertador," as Obiang allows himself to be called, the
highlight of the October celebration is a parade down Ebebiyin's
finest stretch of asphalt. About a hundred goose-stepping soldiers
lead the way, and through bouts of equatorial heat and showers,
delegations from seemingly every town and organization in the nation
march by with banners saluting the president and ruling party.
The heat, the soldiers, the jungle, the out-of-tune band -- I was
starting to feel I had fallen into a tin-pot time warp. Then I
noticed the American flags. These were carried by a delegation from
Mobil Equatorial Guinea, Inc., a subsidiary of ExxonMobil. They also
carried white Exxon flags and placards bearing ExxonMobil's name.
Behind them came delegations with signs announcing Halliburton,
ChevronTexaco, Marathon Oil.
In the past few years, Equatorial Guinea, population 500,000, has
become the third-largest oil exporter in sub-Saharan Africa, after
Nigeria and Angola. Per capita, it is one of the richest countries on
the continent; rated by how much money ends up in the pockets of
people not related to the president, it remains one of the poorest.
Oil is the reason the desperate-looking cafˇs and shops in Ebebiyin
use ExxonMobil signs as decorations. It is why, although his regime
once sent death threats to the U.S. ambassador, Obiang now meets with
senior administration officials and even with President Bush. And
it's why no one spoke out as Obiang treated his nation's treasury as
his own private bank account.
Equatorial Guinea sometimes seems a parody of an oil kleptocracy -- a
Blazing Saddles of the world of petroleum. Yet it has emerged as an
all-too-real example of how a dictator, awash in petrodollars,
enriches himself and his family while starving his people. His
conduct has been aided by American companies: As detailed in Senate
and Treasury Department documents, Riggs Bank helped Obiang shuttle
millions into offshore accounts. Oil companies, meanwhile, made
payments to his regime that the Securities and Exchange Commission
(SEC) is now scrutinizing under the Foreign Corrupt Practices Act.
If America's interest in foreign countries were predicated on human
rights, Equatorial Guinea would have seized our attention long before
its 1995 oil boom. Francisco Macias Nguema, whose self-bestowed
titles included "Leader of Steel," "The Sole Miracle of Equatorial
Guinea," and, of course, "President for Life," was a morph of Idi
Amin and Pol Pot. He killed or forced into exile nearly a third of
the population, decimating in particular the small educated class.
Some of his victims were crucified on the road leading to the
airport. It was one of the 20th century's most brutal genocides, but
no foreign power except for Equatorial Guinea's former colonial ruler
paid attention to it, and the fascist regime of Spain's Francisco
Franco was not overly troubled by human rights abuses. Obiang's coup
was a welcome event, and his rule has not been nearly as ruthless as
his uncle's. Of course,that's not much of an achievement.
Recent State Department reports define Equatorial Guinea as a nominal
democracy but note that "in practice power is exercised by President
Teodoro Obiang Nguema." In the latest election, Obiang was reelected
with 97 percent of the vote in an election "marred by extensive fraud
and intimidation." "Corruption among officials is widespread," one
report adds; the distribution of oil revenues, meanwhile, has "lacked
transparency despite repeated calls from international financial
institutions and citizens for greater financial openness." And
finally, "There is little evidence that the country's oil wealth is
being devoted to the public good."
Human rights abuses continue unchecked. An oil company employee was
recently beaten unconscious by gendarmes when he refused to pay a
bribe. In 2002, more than a dozen security officials at the airport
in Bata, the country's commercial center, were arrested after they
allowed an opposition leader to board a plane for Gabon. If you
happen to be a member of the opposition, or even a suspected member
of the opposition, you live precariously.
For an intimate portrait of what "torture" and "abuse" mean in the
context of Equatorial Guinea, I consulted Tropical Gangsters by
Robert Klitgaard, an economist who worked in Malabo during the late
1980s. The book ends with Klitgaard protesting the torture of a local
colleague who was taken to the presidential compound above Malabo's
harbor, blindfolded, and had his hands tied behind his back. He was
then hung by his ankles -- as Klitgaard writes, "like a marlin at the
weight scale" -- and lowered into a barrel of soapy water and kept
there until he choked. He was pulled out, questioned, and submerged
again. This went on for several hours. Later, electric shocks were
administered to his genitals. He was eventually released.
Even foreign officials have not been excluded from thuggery. John
Bennett was the U.S. envoy to Equatorial Guinea from 1991 to 1994,
and his outspokenness about such abuses angered Obiang. One evening
he received a death threat at the U.S. Embassy. When I talked with
Bennett recently, he recalled meeting the country's president after
the incident. "Obiang said he couldn't believe anyone would threaten
the American ambassador," Bennett said drolly. "It was pretty low
comedy." Soon after, in 1995, the embassy was closed because of
concerns over corruption and human rights.
The country might have disappeared from our geopolitical radar had
Mobil not struck oil in the waters off Malabo later that year. It
quickly became clear that the Zafiro oil field was world-class. After
a decade of development, oil production in Equatorial Guinea stands
at more than 300,000 barrels a day, which at current prices
translates to nearly $5.5 billion a year. A gas field owned by
Marathon Oil has also become a major producer, and the ocean beds off
Equatorial Guinea are being combed for additional deposits. Energy
companies have invested several billion dollars in Equatorial Guinea,
and Marathon is building a major liquefied natural gas facility. It
is now possible to fly nonstop from Malabo to Texas on a weekly
flight known as the "Houston Express."
Equatorial Guinea is not the only country in the region to have
emerged as a major oil supplier for the United States. West Africa is
central to America's effort to reduce dependency on Middle East oil.
The region currently supplies 15 percent of America's energy, and
that figure is expected to rise to 25 percent within a few years. A
report prepared by the African Oil Policy Initiative Group (AOPIG), a
panel of U.S. government and energy industry officials brought
together by the Jerusalem-based neoconservative Institute for
Advanced Strategic and Political Studies, proposed that the Gulf of
Guinea be declared a "vital interest" in U.S. national security
policy. The report, unveiled at a press conference in 2002 by several
congressmen, proposed that the U.S. military presence be enhanced to
include a unified military command for Africa and a home port in S‹o
Tomˇ, an island state in this gulf. Three months later, President
Bush convened a meeting with Obiang and nine other Central African
leaders at the United Nations to discuss military and energy
security. And in a sign of Equatorial Guinea's new strategic role, a
lieutenant colonel in the Special Forces -- the U.S. military attachˇ
from neighboring Cameroon -- represented the Pentagon in the
grandstand at the independence parade in Ebebiyin.
U.S. corporations are now investing more in Equatorial Guinea than in
any other African country except for Nigeria and South Africa. In
2003, the Bush administration reopened the embassy, a move sharply
criticized by human rights groups as a favor to the oil companies and
to Obiang. Frank Ruddy, U.S. ambassador to Equatorial Guinea in the
mid-1980s, decries current U.S. policy, saying that Bush
administration officials are "big cheerleaders for the government --
and it's an awful government."
Obiang has few friends. He has alienated the Spanish -- and through
them the entire European Union -- by accusing Madrid of involvement
in the March 2004 coup attempt. Aside from the Chinese, only the Bush
administration seems to like Obiang. No senior administration
official has issued a public word of criticism against his regime.
Instead, in June 2004, Secretary of State Colin Powell and Energy
Secretary Spencer Abraham each met privately with Obiang in
Washington. When I interviewed Gabriel Nguema Lima, Obiang's son, he
warmly saluted the Bush administration: "The United States, like
China, is careful not to get into internal issues."
Equatorial Guinea exemplifies what is known as the "resource curse,"
the paradox by which countries rich in oil, gas, or minerals tend to
suffer rather than benefit, because the abundance of "easy money"
undermines healthy economic and political development. In Nigeria --
to cite a classic example -- total oil revenues have topped hundreds
of billions of dollars, but poverty is worse than it was before the
oil rush began more than 20 years ago; corruption is a national
sport, and the country is fissuring along ethnic lines.
In Equatorial Guinea, nearly half of all children under five are
malnourished. Even major cities lack clean water and basic
sanitation. A health consultant who recently visited Equatorial
Guinea for the first time since 1993 wrote with dismay in the
International Herald Tribune: "Despite the oil boom, I was unable to
see any improvements in the living standards of ordinary people."
(Obiang is not among the ordinary: In 1999 he paid $2.6 million --
cash -- for a mansion outside Washington, D.C. One of his wives had a
$10,000 daily limit on her Riggs Bank debit card.)
On my way to Ebebiyin, I was stopped several times by underpaid or
rarely paid soldiers who demanded bribes -- in their parlance
cerveza, or beer money. In the town itself, the main hospital is a
place for dying, not healing. The wards are dingy rooms with soiled
mattresses and no medical equipment except for a couple of IV drips.
By contrast, the town's sparkling conference hall is air-conditioned
and had, during a reception for Obiang's cabinet the evening before
the parade, a 25-foot table stocked with bottles of Johnnie Walker,
Smirnoff, and Spanish wine. Apart from such showcase buildings, even
government facilities can be decrepit. When I interviewed the
minister of education in his office, only one of the two light
fixtures had a bulb and I could not tell whether it worked because
the power was out.
Yet to Western oil companies, Equatorial Guinea is an ideal partner.
Nearly all of its oil and gas reserves are offshore, which means
securing the fields is relatively easy. ExxonMobil and Marathon
workers live in gated compounds that operate their own electrical,
water, and communication systems. Unlike in Nigeria or Saudi Arabia,
foreign workers do not face major security threats, and the
government's brutish security apparatus has kept the violent-crime
rate low. Expats freely cruise the rutted streets of Malabo in their
pickup trucks and hang out at the most popular bars, like La Bamba
and Shangri-La, among an abundance of professional women, known as
"night fighters" because they bicker over prospective clients.
Most important for oil companies, Equatorial Guinea is a profitable
place to do business. According to a 1999 report by the International
Monetary Fund, oil companies received "by far the most generous tax
and profit-sharing provisions in the region." The state received only
15 to 40 percent of the revenues from its oil fields, while the norm
in sub-Saharan Africa was 45 to 90 percent.
Even so, the government is expected to reap $1.5 billion in oil
revenues this year, or about $3,000 per capita. But that figure is
deeply misleading; for the average Equatoguinean, scraping by on
roughly $2 a day, $3,000 is an unimaginable fortune. So where does
the money go?
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What do you think?
Peter Maass' book, Love Thy Neighbor: A Story of War, is an account
of the conflict in the former Yugoslavia. He is working on a book
about oil.
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